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Industry definition and article scope
Convenient fast food offers ready-to-eat meals that cater to modern Chinese consumers’ need for quick, affordable dining. While lacking a strict definition, it typically involves pre-prepared meals that are either partially or fully cooked, requiring minimal additional preparation. These meals can be quickly heated or cooked, saving time and catering to fast-paced lifestyles.
The difference between convenient fast food and prepared dishes lies in their preparation level, preservation methods, target Chinese customers, and product categories.
Prepared dishes, categorized as prepared foods, are focused on individual meals and primarily serve B2B catering companies. Convenient fast food, mainly noodle or flour-based, like instant noodles, targets end consumers (B2C) and is stored at room temperature.
The convenient fast food industry in China has evolved from a single category to diverse competition, emphasizing innovation and healthiness. Initially driven by urbanization, challenges emerged from takeaway sector competition and negative perceptions. However, with low-price subsidies and industry transformation, it now offers a varied competitive landscape. New products have emerged, meeting consumer demands for health, variety, and quality. The industry is poised for further development.
In 1990, the industry began with limited options, mainly instant noodles. By 2013, rapid growth had occurred due to urbanization. However, in 2018, increased competition and negative perceptions led to adjustments, prompting companies to innovate. In 2020, the market rebounded with food delivery subsidies and product upgrades. Online consumption surged during the pandemic, influencing trends. Convenient fast food expanded beyond noodles to include healthier and diverse options like self-heating hot pot and snail noodles.
Industry Development Drivers – Demand Side
The growth of the convenient fast food industry in China is fueled by single-person households, busy lifestyles, and the ‘lazy economy’. These products offer convenience and efficiency to consumers, particularly in fast-paced lives. As the Chinese seek quick dining options, convenient fast food saves time and aligns with the homebody culture among younger generations. Additionally, rising incomes prompt consumers to prioritize convenience, enhancing their quality of life.
Industry Development Drivers – Supply Side
The mature supply chain and technological advancements have led to innovation and improved quality in convenient Chinese fast food. Large-scale manufacturers now have both processing and product development expertise, shortening product launch cycles and reducing entry barriers for startups. Technological upgrades, like freeze-drying and self-heating technologies, have notably enhanced the quality and flavor of these products.
Supply chain maturity and technological advancements are driving industry development in China.
Rapid Market Response: A mature supply chain enables quick adaptation to Chinese market changes, allowing for rapid innovation and product development to meet consumer demands.
Lowered Entry Barriers: Modern supply chain systems and OEM outsourcing models streamline production for new brands, reducing the time and resources needed to enter the market.
Enhanced Product Quality: Advanced dehydration technologies improve product quality by preserving texture and nutrients, such as freeze-drying for instant noodles.
Diversified Product Range: Self-heating packaging technology expands product offerings with options like self-heating rice and hot pot, increasing convenience for consumers.
Improved Product Safety: Innovative sterilization techniques ensure product safety and extend shelf life, enhancing consumer trust in the products.
Other listed companies from different sectors are crossing over into China’s convenient fast food sector, seeking a second growth curve.
Leading hotpot chain brands like Haidilao, Dalongyi, Xiaolongkan, and Dezhuang are expanding their presence in the convenient fast-food sector, drawing from their extensive experience in the restaurant industry. Leveraging their strong brand reputation and established supply chains, these restaurant giants are swiftly seizing market opportunities and solidifying their brands in this rapidly growing segment.
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